A Military Freight Bond (SDDC Performance Bond) is a surety bond required by the Military Surface Deployment and Distribution Command for any Transportation Service Provider moving freight for the Department of Defense. It is a three-party agreement between:
- Principal: The freight carrier, broker, forwarder, or logistics company
- Obligee: The SDDC (representing the U.S. government)
- Surety: The company issuing the bond
If a carrier defaults, abandons shipments, or goes bankrupt, the SDDC can file a claim against the bond to recover financial damages.
Important: This bond is not insurance. If the surety pays a claim, the carrier must reimburse the surety in full.
Who Needs a Military Freight Bond?
| Required | Exempt |
|---|---|
| Freight carriers moving DoD cargo | Local drayage carriers |
| Freight brokers | Commercial zone carriers |
| Freight forwarders (surface & air) | Barge carriers |
| Logistics companies | Rail carriers |
| Shipper agents | Sealift carriers |
| Pipeline carriers |
How Much Does a Military Freight Bond Cost?
The premium you pay is a percentage of the total bond amount. Factors affecting your rate include credit score, business financials, years in operation, and carrier type.
| Bond Amount | Good Credit (1-3%) | Average Credit (3-7%) | Challenged Credit (7-12%) |
|---|---|---|---|
| $25,000 | $250-$750 | $750-$1,750 | $1,750-$3,000 |
| $50,000 | $500-$1,500 | $1,500-$3,500 | $3,500-$6,000 |
| $100,000 | $1,000-$3,000 | $3,000-$7,000 | $7,000-$12,000 |
Carriers with 3+ years of DoD experience may qualify for a revenue-based bond: 2.5% of prior 12 months DoD revenue ($25,000 min, $100,000 max).
How to Get a Military Freight Bond
The process follows four simple steps, and specialists like Swiftbonds have placed these bonds for carriers across all 50 states since 2008. Here is how it works:
- Apply: Complete a surety bond application with your company financials, credit information, and SCAC code.
- Quote: Within hours, the surety returns a premium quote based on your bond amount and credit profile.
- Pay: You pay the annual premium via credit card, ACH, or wire transfer.
- File: The surety electronically files the bond with SDDC through the Defense Personal Property System (DPS).
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Complete SDDC Registration Requirements
Before you can haul military freight, you must complete these steps:
- Obtain a SCAC code from the National Motor Freight Traffic Association (NMFTA)
- Register in SAM.gov and obtain UEI and CAGE codes
- Maintain 3 consecutive years of DOT operating authority
- Get certified for e-payments with U.S. Bank Syncada
- Secure $150,000 cargo insurance ($25,000 for bulk fuel carriers)
- Obtain your SDDC Performance Bond from an authorized surety
- Complete HAZMAT certification (if transporting hazardous materials)
- Submit all materials to SDDC for FCRP approval
Frequently Asked Questions
Q: What is the difference between an SDDC bond and a DoD performance bond?
They are the same bond. SDDC is the command that administers the requirement, so the bond is called both an SDDC bond and a DoD performance bond.
Q: How long does it take to get approved?
Bond approval takes 1-2 business days. SDDC FCRP review takes approximately 10 business days.
Q: Does the bond cover damaged cargo?
No. Cargo damage is covered by cargo insurance, not the performance bond.
Q: What happens if my bond lapses?
Your SCAC is suspended in SDDC systems immediately, and you cannot haul military freight until the bond is reinstated.
Q: Can I get a bond with bad credit?
Yes, but you will pay a higher premium (7-12% or more). Some sureties specialize in challenged credit, and approval rates remain high.
Q: Do I need a separate bond for each mode (air, ocean, truck)?
Typically no. The SDDC bond covers surface transportation. Air freight requires additional TSA IAC approval, and ocean freight requires an FMC license with a separate OTI bond.
5 Interesting Things About Military Freight Bonds Not in the Top 10 Sites
- The SDDC was originally called the Military Traffic Management Command (MTMC). Bonds issued before the name change in 2004 were called MTMC bonds, and some older carriers still use that term.
- Your bond amount can decrease over time. If you have three consecutive years of perfect performance with no claims, you may qualify for the revenue-based calculation, which could lower your required bond amount if your DoD revenue is modest.
- The bond does NOT cover late deliveries. While the bond covers complete failure to deliver (abandonment, bankruptcy, default), it explicitly excludes operational issues like late pickup, excessive transit times, and refusals. Those are handled through performance scoring, not bond claims.
- You need a separate SCAC code for each mode of transport. If your company operates trucks, air freight, and ocean freight, you need different SCAC codes for each mode. The SDDC bond attaches to your primary SCAC but your registration must list all codes.
- Electronic filing is mandatory. Unlike many surety bonds where you receive a paper document, SDDC bonds must be filed electronically by the surety company through the Defense Personal Property System (DPS). You never physically receive the bond—it is transmitted directly to the government.
Conclusion
A Military Freight Bond (SDDC Performance Bond) is a non-negotiable requirement for any carrier, broker, forwarder, or logistics company wanting to transport Department of Defense freight. Bond amounts range from $25,000 to $100,000 based on your service area and carrier type, with annual premiums typically costing 1-12% of the bond amount depending on credit. The bond covers carrier default, abandonment, and bankruptcy, but not cargo damage or late deliveries.
Before applying, ensure you have your SCAC code, 3 years of DOT authority, and $150,000 in cargo insurance. The bond is filed electronically by your surety, and once approved, you can begin receiving military freight tenders. The military freight market offers stable, high-volume opportunities—but only for carriers who meet the bonding requirement.
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